OCC Returns to Practice of Protecting Banks Against Consumers–This Time on Arbitration

by Jeff Sovern

The Office of the Comptroller of the Currency has a long history of being captured by the banks it regulates, interrupted briefly during the Obama administration. But now that it is headed by Acting Comptroller and former bank lawyer Keith Noreika, it is once more protecting banks from predatory consumers.  First Norieka sent CFPB Director Richard Cordray a letter expressing safety and soundness concerns over the CFPB's arbitration rule. Cordray wrote back noting his surprise at Norieka's letter in light of the Bureau's extensive consultation with the OCC and other prudential regulators on just that matter. Cordray noted that no one from the OCC had ever raised such concerns. The director also pointed out that a "majority of depository institutions today operate without arbitration agreements," and that no evidence exists that they are less safe or sound than institutions that use arbitration. But now the WSJ is reporting that Norieka has asked that the rule be delayed because "The OCC should be granted the opportunity to conduct an independent review of the CFPB data to determine the safety and soundness implications of the Final Rule.”  Never mind that the OCC has already had years to conduct a review and waived its chance to do so. This is surely just politics in the worst sense, in that Norieka is either hoping to delay the rule until a new CFPB director is in place, or (as the WSJ implies) help congressional Republicans looking to use the Congressional Review Act against the arbitration rule.

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